updated 6/20/2008 11:02:42 AM ET 2008-06-20T15:02:42

Guests: Rachel Maddow, Harold Ford, Jr., Michael Smerconish, Stephen Hayes

DAVID GREGORY, HOST:  Tonight, Obama‘s broken promise on campaign money.  He won‘t use taxpayer funds after all.  He‘ll rely on his supporters to carry him to new financial heights.  McCain doesn‘t like it and he thinks voters won‘t either, as THE RACE FOR THE WHITE HOUSE rolls on.

And welcome to THE RACE.  I‘m David Gregory.  Happy to have you here, your stop for the fast-paced, the bottom line and every point of view in the room.

Show me the money.  Obama will not be reined in on campaign cash.  In a moment you‘re going to see why.

Inside the War Room tonight, where some of Obama‘s cash s going.  A new TV ad designed to reintroduce him to voters. 

So how intense is this campaign?  Well, just ask the wives who are gearing up for their own high-octane role in this contest.

And in “Three Questions” tonight: Dead or alive?  Should America insist on bringing Osama bin Laden to trial?  One candidate thinks so. 

The bedrock of our program, a panel that always comes to play.

And with us tonight, Harold Ford, Jr., chairman of the Democratic Leadership Council and an NBC News analyst; Rachel Maddow, host of “The Rachel Maddow Show” on Air America,” also an MSNBC political analyst;

Michael Smerconish, radio talk show host on WPHT in Philadelphia and columnist for both “The Philadelphia Inquirer” and “The Philadelphia Daily News.”  And Stephen Hayes is here tonight, senior writer with “The Weekly Standard.”

We begin as we do each night, with everyone‘s take on the most important political story of the day.  It‘s “The Headline.” 

I‘ll get us started here tonight.  My headline, “Money Talks.” 

Obama has opted out of the public financing system for the general election campaign.  What that means is he won‘t take the nearly $85 million that the government would give him after the convention.  That money is compiled from taxpayers who agree to give their three bucks on their tax returns.

Earlier this year, Obama said that he would take public financing.  So why has he broken his promise?  This is what he told supporters today. 

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  John McCain‘s campaign and the Republican National Committee are fueled by contributions from Washington lobbyists and special interest PACs.  But we have already seen that he‘s not going to stop the smears and attacks from his allies running so-called 527 groups who will spend millions and millions of dollars in unlimited donations. 

(END VIDEO CLIP)

GREGORY:  Obama decries the role of lobbyist, yet he has received lobbyist money in the past.  Today, McCain chided his rival for breaking his word to accept federal funds, as McCain has agreed to do. 

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  You know, this election is about a lot of things, but it‘s also about trust and it‘s also whether you can take people‘s word.  Because when you campaign for the highest office in the land, you make certain commitments to the American people.  And if you‘re not even willing to keep one that is as impactful in a political campaign as his decision to finance his own campaign and completely contradict his solemn pledge... 

(END VIDEO CLIP)

GREGORY:  Why is this so important?  Well, here‘s the bottom line.  Obama has a huge financial advantage in this race, and he isn‘t about to squander it.  That‘s behind today‘s decision. 

Here is the take through April.  Obama, $272 million.  McCain, just $101 million. 

One Democrat told me today the Obama campaign believes it can raise as much as $500 million.  Compare that to President Bush, who broke records in 2004 by raising nearly $350 million.

The practical effect of this?  TV advertising.  Obama can be on the air in more places for a longer period of time than McCain can.  It is the political equivalent of carpet bombing. 

Will it prove decisive in November, or will what is viewed as an act of political expediency backfire for the self-proclaimed candidate of change? 

Harold Ford, your headline tonight also on this topic.  It‘s the big headline today.  What is it?

HAROLD FORD, JR., MSNBC POLITICAL ANALYST:  “Advantage Obama.”

He‘ll take a little bit of a political hit for this decision to disavow the public financing, but when you consider $150 million to maybe $350 million more in campaign money, 20 additional states he can campaign vigorously in, what that means for downstate candidates, Democrats running for Senate, for governor, for Congress, and even state and local races, and when you consider also the amount of money that will be spent by the 527s on the Republican side, and I can tell you as one who put up with it, it will be vicious, it will be relentless. 

For Barack Obama to say he wants to expand the two million or so contributors who have already given to his campaign with the possibility of attracting an additional two to three to maybe five million new voters, in a lot of ways this is democratizing the system.  There will be a little political hit here.  But at the end of the day, $200 million to $300 million additional to campaign, to help your campaign, to help other Democrats win in the South and the Midwest, will be a good thing for him and a good thing for the party. 

GREGORY:  All right.  More on what McCain does to make this an issue that he can use against Obama.  Going inside the War Room in our next segment. 

Rachel, tonight you‘re looking at McCain and a loss you think that may be coming his way on Capitol Hill. 

RACHEL MADDOW, MSNBC POLITICAL ANALYST:  I think that‘s right, David. 

My headline tonight is, “McCain‘s GI Bill Gamble Doesn‘t Pay.”

There‘s word today from Capitol Hill that the Democratic Congress is poised once again to approve full funding for the Iraq war with no strings attached to try to end that war.  But it also looks like they‘ve managed to include with the funding the GI bill for veterans.

McCain took a political gamble in opposing this very popular bill.  Now he‘s lost even the White House‘s support for that position.  I think this is a political loss for John McCain on an issue on which he ought to look very, very strong. 

GREGORY:  At the same time, he can also argue that it‘s a position of principle that he has got the background to—you know, to really muster, even if he takes a hit for it.  But it‘s certainly one that he didn‘t want to lose.  But now he has got a fresh disagreement with the White House. 

MADDOW:  Sure.  It does actually give him some room from Bush, because Bush had threatened to veto this and has now apparently—we heard word today, apparently changed his mind.  It does give him some room from Bush on this, certainly.  But I think overall, being seen as voting against veterans‘ benefits in war time is going to be hard for McCain to explain. 

GREGORY:  All right.  You talk about war time.

Steve Hayes, tonight your headline has to do with what Obama thinks America should do if we ever caught bin Laden.  What is it?

STEPHEN HAYES, “THE WEEKLY STANDARD”:  Yes.  Hey, David.  My headline is “Obama‘s Osama Gaffe.”

In yet another example of Barack Obama‘s law enforcement first approach to terrorism, he said in an interview last night that he favors sending Osama bin Laden to trial. 

Let‘s listen to the clip. 

(BEGIN VIDEO CLIP)

OBAMA:  I think what would be important would be for us to do it in a way that allows the entire world to understand the murderous acts that he‘s engaged in and not make him into a martyr. 

(END VIDEO CLIP)

HAYES:  Well, sure thing.  The first thing this morning, the Obama campaign had sent out e-mails to reporters telling them, reassuring them, that Barack Obama indeed favors the death penalty for Osama bin Laden.  But this is a gaffe, I think, that the McCain campaign is sure to talk about in the coming days. 

GREGORY:  All right.  We‘ll get into this a little bit more in “Three Questions” as well, because there are lots of practical difficulties in trying these prisoners at Gitmo, let alone Osama bin Laden, if you can get to him. 

Smerc, your headline tonight deals with an incident that the Obama campaign had to deal with that was embarrassing. 

MICHAEL SMERCONISH, RADIO TALK SHOW HOST:  Yes.  David, my headline is, “Exit Stage Left.” 

Obama volunteers caused the campaign embarrassment earlier this week by barring two Muslim women from sitting behind the candidate and thereby keeping them with their headscarves out of the same camera frame as the senator.  Now, what this episode really displays is the depth of concern within the Obama campaign over the Internet rumors. 

Chief among them, that Obama is a Muslim.  He is not.  These viral urban legends, they become so pervasive, that the Obama campaign has established a Web site just to knock them down.  The only thing I‘ve not had come into my “in” bin is that he set loose the first alligator in the New York City sewer.

(LAUGHTER)

GREGORY:  Well, it is an issue that this is the definitional part of the campaign.  And he cannot lose that.  If he falls behind on that, he may not be able to catch up. 

We‘re going to take a break here, come back, go inside the War Room, look at the tactics of these campaigns. 

What does John McCain do now with this broken pledge by Obama?  How does he turn it to his advantage?  He‘s got a disadvantage when it comes to campaign cash—when THE RACE continues.

(COMMERCIAL BREAK)

GREGORY:  We‘re back on THE RACE FOR THE WHITE HOUSE.  Going inside the War Room now to look at strategy tactics, what‘s working and what isn‘t inside these campaigns.

And back with us tonight, an all-star panel: Howard Ford, Jr., Rachel Maddow, Michael Smerconish and Stephen Hayes.

All right.  Topic number one, what‘s Obama going to do with all that cash he‘s got that we just talked about?  Well, he‘s going to unveil his first general election ad.

Wait until we show you the map of where it‘s playing.  First a clip.  This is about biography.  This is about reintroducing himself to the country.

Watch a section of it.

(BEGIN VIDEO CLIP)

OBAMA:  America is a country of strong families and strong values.  My life‘s been blessed by both.

I was raised by a single mom and my grandparents.  We didn‘t have much money, but they taught me values straight from the Kansas heartland where they grew up—accountability and self-reliance, love of country, working hard without making excuses, treating your neighbor as you‘d like to be treated.

(END VIDEO CLIP)

GREGORY:  Here‘s what‘s striking.  A bio ad in 18 states, including Alaska, Indiana, Missouri, Montana, North Carolina, North Dakota. 

Rachel, this is pretty bold in terms of canvassing the map.  They talk about a 50-state strategy.  Nobody believes 50 states, but they are certainly targeting a lot more than they might otherwise with this ad. 

MADDOW:  Right.  The way we all reacted to learning that—to hearing that announcement from them about the 50-state strategy was we‘ve got to wait to find out whether or not they are faking, whether or not they‘re just trying to lure the McCain campaign into spending money on places that McCain wouldn‘t expect to have to defend.  Well, when you run an ad like this in North Dakota, it looks—makes it look like it‘s either a really good fake or they‘re not faking at all.  And they think they are going to have enough money and the kind of message to compete everywhere. 

GREGORY:  Smerc, quickly, you‘re hearing from people on your radio program all the time.  How important is it for Obama to reach those Independent voters and say, this is who I am?  You don‘t really know who I am, and I‘ve got to educate you a bit. 

SMERCONISH:  It‘s critically important that he define himself with a general election audience before the 527s or the McCain campaign attempt to define him.  And you know what I thought of when I watched that for the first time?  “Morning in America.”  That is a Reaganesque commercial that‘s put on the air as an opening salvo. 

GREGORY:  All right.  Let me move on here.

Obama‘s cabinet, what might he do?  Joe Klein, reporting in the new issue of “TIME” magazine says this—we‘ll put it up on the screen.

“He is particularly intrigued by the notion that Lincoln assembled all the Republicans who had run against him for president in his war cabinet, some of whom disagreed with him vehemently and persistently.  The lesson is not to let your ego or grudges get in the way of hiring absolutely the best people.”  “He,” meaning Obama, “said, ‘I have an interest in casting a wide net, seeking out people with a wide range of expertise, including Republicans, for the highest position in his government.‘”

“‘I don‘t know want to have people who just agree with me.  I want

people who are continually pushing me out of my comfort zone.‘”

Steve Hayes, a question came up about Defense Secretary Gates, would he keep him?  A little bit coy on that.  Didn‘t want to be pinned down, but he did single out praise for some of the Republicans in Bush I and their approach to foreign policy. 

How important would that be? 

HAYES:  Well, I think it‘s a pretty interesting strategic move right now because what it does it sort of speaks to the kind of campaign that Barack Obama is running.  He basically is running as a post-partisan figure. 

You know, “I‘m sick of Washington, it‘s this partisanship.  I‘m not of Washington.  I‘m not like the rest of those people.”

And the interesting point about Robert Gates is if you read further in Joe Klein‘s very interesting piece, Gates—Obama is open to keeping Gates.  And Klein reports that Gates is potentially open to staying.  Now, that‘s interesting because last week Gates was asked about the two candidates and their plans for Iraq.  And he gave a very sort of (INAUDIBLE) answer that said, well, both candidates would probably handle it well, which, of course, accrues to the advantage of Barack Obama in a situation like that. 

GREGORY:  It‘s also interesting, you know.  There‘s talk about this in the past. 

I remember John Breaux meeting with George W. Bush in 2000.  He‘d come on, ended up not wanting to do that.

You know, the carryover was Norman Mineta at the Department of Transportation.  You know, we didn‘t realize how important that would be, obviously, on 9/11.  But nevertheless, it wasn‘t a big enough move.

Keeping Gates at Defense, that‘s a very important position for someone of your own party.  That could send a very strong signal if it happened. 

Let me move on and talk about campaign finance again, and the fact—again, the big headline today, Obama is opting out of public financing.  He‘s going to run up the totals from his supporters.  John McCain not happy about it because they had a deal.  He‘s accepting the public funds. 

Here‘s what McCain said today.

(BEGIN VIDEO CLIP)

MCCAIN:  He signed his name himself on a piece of paper that said that he would—if I the Republican nominee took public financing in the general election, that he would too.  He has completely reversed himself and gone back not on his word to me, but on the commitment that he made to the American people.  That‘s disturbing. 

(END VIDEO CLIP)

GREGORY:  All right.  Harold Ford, be a little counterintuitive here.  If you‘re the Obama campaign, what do you look out for from McCain as a line of attack on this? 

FORD:  I think you give him a few days to lay out why he thinks this is hypercritical, and then you begin to ask simple questions.  He flip-flopped on taxes—that being John McCain.  He‘s flip-flopped on offshore drilling for oil. 

Now, he probably has legitimate reasons for these things and the country will have an opportunity to weigh that.  Senator Obama, a year after this campaign has started, has figured that he will be attacked viciously, relentlessly by the other side. 

(CROSSTALK)

GREGORY:  Right.  But Harold, let me just interrupt you.  He knew that was the system going in.  He was aware that the 527s were out there when he made that initial pledge to take public funding. 

FORD:  Well, David...

GREGORY:  I mean, it looks politically expedient.

FORD:  ... there‘s no one on this program who‘s ever been attacked by a 527 other than me.  I can tell you, you want the resources and the money to be able to respond. 

Senator Obama has not—his average contribution is less than $100 per person.  If, indeed, John McCain will make his lead argument that, “Barack Obama is raising more money than I can raise,” because you better believe, if John McCain thought he could raise $200 million to $300 million, he‘d would have opted at it as well.

Barack Obama, advantage.  He‘s campaigning in 18 more states.  He will assemble, begin to talk legitimately and seriously about assembling a panel.  I should say a cabinet of people who are the best and the smartest in the country.  He‘s able to make the case because he will have the money.  Possibly before.

GREGORY:  Real quick, Steve Hayes, if campaign finance reform were going to be an issue that really resonated with voters, John McCain might have beaten Bush in 2000. 

HAYES:  Yes.  Look, I think this is a snoozer of an issue.  But I think that the Obama campaign may have done something very smart. 

They were being pummeled for 48 hours on national security.  And I would argue that Barack Obama made two serious gaffes in that short period.  What they did today was take an issue that they knew they were going to get beat up on, where they already have an advantage, float it.  And then the national press, I mean, this is what we‘re all talking about. 

I think it was a very clever move. 

GREGORY:  Right.

MADDOW:  I just...

GREGORY:  All right.  Let me move on and talk about—Rachel, this is for you.  I want to talk about some battleground states.  Want to get them in here.

Quinnipiac had some polling.  We‘ve been talking about the Obama bounce, where is it.  Well, look at these states.

If you look at Florida, advantage Obama, 47-43.  Ohio, advantage Obama, 48-42.  Pennsylvania, advantage Obama, 52-40. 

These margins seem a little bigger.  If makes me a little bit skeptical.  But if you‘re inside the McCain campaign and you look at Pennsylvania, in particular, you‘ve got to have some raised eyebrows. 

MADDOW:  Yes, there goes the common wisdom that Barack Obama can‘t win Pennsylvania.  I mean, head-to-head match-ups at this point, again, aren‘t necessarily predictive.  But looking at these battleground states, these are numbers that were not expected after the narrative that came out of the primary campaign about where Barack Obama might have weaknesses as evidenced by how he performed against Hillary Clinton.  This is counterintuitive. 

I think the most interesting head-to-head poll that came out in addition to those was the one that showed John McCain ahead in North Carolina, but only by four points.  I would have expected that to be more like 14 points.

So, again, it is early.  I do think Barack Obama has gotten a bounce of getting his nomination locked up.  But that is good news for the Obama campaign. 

GREGORY:  Perfect segue here.  We‘re going to take another break. 

“Smart Takes” is next.  And we‘re going to look at the map and some permutations.  We love to do this, move states around and look at the potential for Obama to win the popular vote, but McCain actually take the presidency based on states. 

We‘ll show that to you, talk about it when we come back.

(COMMERCIAL BREAK)

GREGORY:  Back now for “Smart Takes,” the analytical, provocative, the interesting.  We look it all up so you don‘t have to.

And here again, Harold, Rachel, Michael and Stephen.

OK.  One comment per (ph) here.

The first one is from the Politico.  The headline: “Obama Could Win the Vote, But Lose the Election.”  We‘ll put it up on the screen for you and walk you through it.

“Here‘s the scenario: Obama racks up huge margins among the increasingly affluent, highly-educated liberal coastal states, while a significant increase in turnout among black voters allows him to compete but not to win in the South.  Meanwhile, McCain wins solidly Republican states such as Texas and Georgia by significantly smaller margins than Bush did in ‘04 and ekes out narrow victories in places such as North Carolina and Indiana.”

“One possible result, even as the national mood moves left, the ‘04 map largely holds, Obama‘s 32 new electoral votes from Nevada, New Mexico, Colorado and Virginia are offset by 21 new electoral votes for McCain in Michigan and New Hampshire.  And despite a two-or-three-point popular vote victory for Obama, America wakes up on January 20th to a President McCain.”

Rachel, a lot to chew on there. 

MADDOW:  It is a lot to chew on, but I think it‘s totally feasible.  I mean, this is the—this highlights the real challenge for the Obama campaign. 

He needs to not only compete in some red states, if he‘s planning on losing some places that John Kerry won, he‘s not going to just compete in red states, he has actually got to win some because the popular vote doesn‘t matter.  You‘ve got to win the electoral college, which means you‘ve got to be 50 plus one in these states. 

And I think that he‘s got a real challenge.  I‘ve been saying all along that I see an advantage to McCain in November.  This is part of the reason why. 

GREGORY:  Right.  Well, it‘s redrawing that map.  And they have got to hold that historical ground for each party.

MADDOW:  Yes.

GREGORY:  But it‘s where the takes are, where the new takeaways are where they can post (ph) that makes it so interesting. 

Let me move on here.  Karl Rove, the president‘s former senior adviser, taking both candidates to task for economic populism when it comes to the issue of gas and taxes and the energy debate. 

This section that we‘re going to put up on the screen is Rove taking on Obama and his call for a windfall profits tax against the oil companies.  This is what Rove says...

“Why should we stop the oil companies?  They make about 8.3 cents in gross profit per dollar of sales.  Electronics makes 14.5 cents per dollar, and computer equipment makers take in 13.7 cents per dollar.”

“It‘s not the profit margin but the total number of dollars earned that‘s the problem, Mr. Obama might say.  But if that were the case, why isn‘t he targeting other industries?  Oil and gas companies made $86.5 billion in profits last year.  The financial services industry took in $498.5 billion in profits.  The retail industry walked away with $137.5 billion, and information technology companies made up with $103.4 billion.”

“What kind of special outrage does Mr. Obama have for these companies?”

Smerc, is this a way to say that voters just aren‘t going to buy what they would see as a gimmick, going after the oil companies? 

SMERCONISH:  I don‘t know that voters would wade through that argument, even though I think it makes logical sense.  I mean, what he says is that the profit margin per dollar for the oil companies is eight cents and something else.  And for Microsoft, it‘s 27 cents per dollar. 

I can‘t fill my car with my Mac.  That‘s the problem.  And so you‘re going to have a very hard time, you know, getting this, as the president would say, to resonate with voters even though it makes logical sense. 

GREGORY:  Yes.  I mean, the point is, does somebody want somebody‘s head?  Does somebody have to be responsible for the fact that gas prices are up?  And you‘ve got pain at the pump while oil companies are making a lot of money.  You know, does it resonate?  Does it get us to the actual debate on what we do next?

We‘re going to take a break here.  We‘re going to come right back and we‘re get into the first ladies facing off. 

We‘ll see where this goes when we come right back. 

(COMMERCIAL BREAK)

(NEWS BREAK)

GREGORY:  Welcome back to RACE FOR THE WHITE HOUSE. I‘m David Gregory.  Happy to have you here for the back half.  Coming straight ahead here is a second special edition of the war room.  What do the wives have to do with it?  Well, apparently they have a lot.  This round, we‘re breaking down the battle of the spouses, Cindy McCain versus Michelle Obama. 

Back with us, Harold Ford Jr., chairman of the Democratic Leadership Council and NBC News analyst, Rachel Maddow, host of “The Rachel Maddow Show” on Air America and MSNBC political analyst, Michael Smerconish, radio talk show host on WPHT in Philly and columnist for both the “Philadelphia Inquirer” and the “Philadelphia Daily News,”  and Stephen Hayes, senior writer with the “Weekly Standard.” 

Battle of the spouses.  First up, the image makeover here.  Michelle Obama appearing on “The View” yesterday.  Cindy McCain also presenting herself on the pages of “Vogue.”  Let‘s listen to Michelle Obama talking about herself in this campaign on “The View.” 

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, WIFE OF BARACK OBAMA:  People aren‘t used to strong women.  I don‘t think there are tons.  We don‘t know even how to talk about them. 

I wear my heart on my sleeve, just like all of you guys.  At some level, when you put your heart out there, there‘s a level of passion that you feel.  It‘s a risk that you take.  But one of the things I‘m counting on is that people will see through it.  The more they get to know me, they get to know our family, it will become clear who I am and what I care about.  I don‘t worry about it. 

(END VIDEO CLIP

GREGORY:  On news stands now, the new “US Weekly” that has the Obama‘s on the cover; “Why Barack Loves Her” is on the cover.  She shops at Target, loves “Sex in the City” and never misses the girls recitals, the untold romance between a down to Earth mom and a man who calls her my rock. 

Here‘s Cindy McCain on the cover of “Vogue Magazine”—or a spread in “Vogue Magazine” as well, taking some photos.  Both of these, it seems, in particular with Michelle Obama, has the look of a political makeover, a reintroduction at the same time that her husband is going through a reintroduction to voters. 

MADDOW:  I think that‘s right.  You don‘t run for first lady, but it‘s undoubtedly part of what people think about when they think about the candidates.  I think it ends up them trying to put a cultural stamp on the marriage, on the family, and, thereby, on the candidate.  I‘m going to make a weird analogy here, but you remember the sitcom “The Facts of Life?”  I kind of feel like the way that they are making each other over is that—the Obama campaign, at least, is trying to make Cindy McCain into Blair and to make Michelle Obama into a mix between Natalie and Joe.  I‘m the down to Earth likable one and she‘s the very rich, fancy, good manners one. 

I think they are trying to make Michelle Obama essentially seem like the likable girl next door, less unknowable than the Republican machine would like her to seem. 

GREGORY:  Let‘s take a look at one of the issues that really caused controversy for Michelle Obama that Cindy McCain has jumped in the middle of as well on a couple of occasions, the issue of pride in America.  We‘ve put together some of the sound.  Watch this. 

(BEGIN VIDEO CLIP)

M. OBAMA:  Let me tell you something.  For the first time in my adult lifetime, I‘m really proud of my country. 

CINDY MCCAIN, WIFE OF JOHN MCCAIN:  Everyone has their own experience.  I don‘t know why she said what she said.  All I know is I‘ve always been proud of my country. 

I‘m an emotional woman when it comes to service to our country.  I watched many people‘s children leave and go serve.  This is something that is the fiber of the McCain family.  It was nothing more than me saying look, I believe in this country so strongly.  I think she‘s a fine woman.  She‘s a good mother.  We‘re both in an interesting line of work. 

(END VIDEO CLIP)

GREGORY:  In fact, Michelle Obama has explained those comments about not saying that she meant that she was proud for the first time, but that it kind of reinforced the pride in her country based on her own life.  David Axelrod with the Obama campaign saying that he found the comments of Cindy McCain unfortunate, because “I don‘t know two people who love this country more than Barack and Michelle Obama.” 

Steve Hayes, what is the state of this issue and how the Republicans will seek to use it to create questions about—ultimately, it‘s about Barack Obama, isn‘t it? 

HAYES:  It could be.  It depends, to a certain extent, on how much the Obama campaign puts Michelle out and the kinds of things she‘s said.  She said some things that I think are deserving of criticism; calling the country downright mean, the comment about pride in her country.  Look, it‘s totally legitimate when Barack Obama‘s campaign is putting her out there to give speeches on his behalf for Republicans and conservatives to react to that.

The question, I think, we face going forward is are these representative of how Michelle Obama thinks or were they anomalous?  Were they just things that she said because she‘s not, after all, a politician and she doesn‘t watch every word the way a lot of politicians do. 

GREGORY:  Harold, let‘s talk about political personalities, strengths and weaknesses.  I‘m here talking about Barack Obama and Michelle Obama as a couple and as a political couple.  This is how the “New York Times” reports it when it comes to Michelle Obama, “she burns hot where he banks cool.  That too can make her an inviting proxy for attack.  The caricatures,” the “New York Times” reports, “of Mrs. Obama as the angry black woman confound her, friends say.  Her own family crosses racial boundaries.  Her mother in law and a sister in law are white and she has spent much of her adult life trying to address racial resentment.”

In what way, do you think, she needs as a political matter a kind of fine tuning for her to go out there on the campaign trail. 

FORD:  Look, I can‘t imagine a set of kids in America who wouldn‘t want a mom like Michelle Obama.  She‘s dynamic.  She‘s fun.  She‘s loving.  She‘s caring. She‘s smart.  She has a husband whom she loves and supports as well.  Does she have a passion about her?  Absolutely.  Frankly, I think the people in Pennsylvania, Ohio, West Virginia and Arkansas are going to be more concerned that a year ago tonight, a barrel of oil traded for 68 dollars and today it is trading at 135. 

Cindy McCain, leave her alone as well.  Spouses should be off limits.  If the press continues to press the issue, the candidates and the campaigns will.  I hope that both spouses—I respect them both, like them both.  At the end of the day, the choice is between John McCain and Barack Obama.  The American people are smart enough to know that. 

GREGORY:  Obama made this plea, Smerc—he was talking to CBN, the Christian Broadcast Network, talking about the role of spouses in the campaign.  This is what he said. 

(BEGIN VIDEO CLIP)

OBAMA:  This has unfortunately become a habit in our politics, where anything is fair game and we just make things up about people.  I have said publicly before and I‘ll say again, I think families are off limits.  I would never consider making Cindy McCain a campaign issue.  If I saw people doing that, I would speak out against it.  The fact that I haven‘t seen that from John McCain is a deep disappointment. 

(END VIDEO CLIP)

GREGORY:  Just for fairness here, a statement from the McCain campaign goes like this; “Senator McCain agrees with Senator Obama that spouses should not be an issue in this campaign.  Unfortunately, when the DNC was attacking Mrs. McCain, he was not strong enough to stand up and speak out against the outrageous charges leveled at her by his party chair, Howard Dean.  Obama‘s silence speaks volumes and it‘s unfortunate that he would single out others for a standard he himself has failed to live up to.”

Smerc, the reality is, whether other people make this an issue, whether the press makes it an issue, the Obama campaign, in particular, and the McCain campaign understand that the positioning of their wives, or the candidate‘s wives matters.  Ultimately, it goes to defining the first family and ultimately defining the candidate.  That‘s why you have a new chief of staff for Michelle Obama, to deal with potential attacks, and why there‘s been talk—you talk to Democrats who are inside the Obama campaign, or close to it as surrogates, who say that Michelle Obama does needs some retooling as a surrogate, as somebody who is out there on the campaign trail. 

SMERCONISH:  I like the way you framed it.  What occurs to me, David, is there‘s about to be a marriage of convenience for both of these gentlemen in the selection of vice presidential running meat.  That will be a calculus determined by what they bring to the table politically speaking.  We don‘t learn much about John McCain or Barack Obama by that choice.  But in the marital choice, I do think there are some insights that are to be gleaned about the character of each of them.  I would just echo what Steven said, the more substantive a person puts themselves out on the campaign trail, the more I think they then invite attack on substance as to what they have articulated. 

MADDOW:  If I just could add one quick thing.  In terms of the McCain campaign response to Obama‘s statement there; when they say that Howard Dean attacked Cindy McCain and Barack Obama should have defended Cindy McCain there, I don‘t know what they are referring to, other than Howard Dean or the DNC having directing reporters towards question about the McCain campaign using Cindy McCain‘s corporate jet without properly reimbursing them for that.  Other than that—I don‘t know what other references there been about Cindy McCain at all?  I see that push back as being substantively, on the merits really strange, unless there‘s some other attack on her that I forgot about. 

GREGORY:  What‘s interesting is that you don‘t really see the candidates engaging each other‘s spouses, making an issue of it.  Either Cindy McCain has brought up the issue of the pride line on several occasions or surrogates, or, frankly, it‘s the press bringing it up as an issue.  You see them responding internally, in terms of their positioning with the first ladies and how they‘re -- 

FORD:  Can we stipulate one thing here?  Cindy McCain is a good mom.  Michelle Obama is a good mom and great people.  Let‘s get on to talking about Barack and John McCain. 

MADDOW:  Talking about somebody‘s wife and talking about somebody‘s corporate jet are two totally different things. 

FORD:  I wish I had a corporate jet.  You can all fly with me. 

GREGORY:  Exactly.  We‘re going to take a break here.  When we come back, we‘re going to mix it up a little bit, three big questions about this race, including this, Obama on Osama bin Laden.  Should the U.S. put the number one terrorist in the world on trial if he‘s captured?  We‘ll come back and debate it when we return.

(COMMERCIAL BREAK)

GREGORY:  We‘re back now with three questions.  Turning our attention to three big issues of the day of the ‘08 race.  Still with us, Harold Ford Jr., Rachel Maddow, Michael Smerconish and Steven Hayes.  OK, the first one has to do with Osama bin Laden.  He talked about not making him a martyr.  Listen. 

(BEGIN VIDEO CLIP)

OBAMA:  What will be important would be for us to do it in a way that allowed the entire world to understand the murderous acts that he‘s engaged in and not make him into a martyr. 

One of the high water points, I think, of US foreign policy was the Nuremberg trials, because the world had not seen before victors behave in ways that advance the set of universal principals. 

(END VIDEO CLIP)

GREGORY:  First question then, the terror debate.  Should the U.S.  seek to try Osama bin Laden if and when he‘s captured?  Steve Hayes, take this on. 

HAYES:  I can‘t imagine that he would go—that we would actually capture him.  I think he would likely die before he‘s captured.  Look, the only reason to keep Osama bin Laden alive is if you think he has intelligence value.  There‘s no way he‘s going to talk.  We‘re clearly not going to water board him.  There‘s no reason to have Osama bin Laden alive.  I think everything we do should be pointing toward killing the man.  Don‘t worry about capturing him. 

GREGORY:  Harold, why shouldn‘t this be an issue that comes up between McCain and Obama, in terms of the mindset toward approaching terror?  It‘s a very difficult proposition to try any of these captures, any of these terror suspects at Guantanamo Bay, let alone Osama bin Laden.  Does it reflect lack of experience, some naivete on the part of Obama and his team to suggest that they would waste all of that energy and expend all of that effort in such an enterprise? 

FORD:  That assumes that Barack wouldn‘t want to see bin Laden killed.  I don‘t think there is any question that he would.  He‘s stated that over and over again.  I conceptually, theoretically, trying someone, it‘s the American way.  Yet, I join with millions of Americans and Stephen on this.  I hope that when he is captured, there‘s no need to try him. 

GREGORY:  Quickly on this, Rachel, talk about the political framing of this.  We understand why the McCain campaign would want to hit Obama on a September 9th -- 10th mindset.  We‘ve seen that movie before, the 2004 race, Bush versus Kerry.  Why do you think Obama is continuing to get into this level of debate and framing the issues this way? 

MADDOW:  I think Obama sees that he has strength here.  When he comes out and he says, you know what, I want America to pursue terrorism legally, he‘s not saying I want to pursuit it with the law.  He‘s saying, I want us to act legally when we do it.  I want us to pursue terrorism within the bounds of the law as we understand it as Americans.  That means acting within our values.  That means acting to show that we value the rule of law.  That‘s the whole message against terrorism and against tyranny. 

So I just think that there‘s a story to be told and Obama has started to tell it, saying, listen, we are in a big mess with what we‘ve gotten ourselves into with Guantanamo and these secret CIA prisons and all these other folks.  We don‘t know what to do with them.  The reason we got into that mess is because we acted illegally.  That‘s very different than what Stephen has been saying tonight, which is that Obama wants to take a law enforcement first approach.  I don‘t hear that from Obama at all.  He‘s simply just saying, we shouldn‘t be illegal in the way we act? 

SMERCONISH:  May I get a quick point in on this?  I‘ve had the opportunity to interview Senator McCain this week on this issue, and Barack Obama in the past.  Rachel is right.  Barack Obama perceives this as a strong suit for him.  What he has said is that the McCain campaign represents the status quo, a status quo where there‘s a non-hunt for bin Laden currently underway in those tribal regions in Pakistan and he represents something different than what we are doing now. 

GREGORY:  All right, let me move on here, because I want to get to second question.  It has to do with this desperation to drill, the oil debate, gas taxes and the like.  There‘s so much pain at the pump.  The question is, the rush to ease your pain at the pump, is there an authentic energy debate that‘s happening now?  Harold, do you think it‘s an authentic debate? 

FORD:  The front page of one of the national newspapers today indicates that drivers have cut back by 30 billion miles traveled in the last eight months compared to a year ago.  It‘s clear that Americans are forced to because of the cost of gasoline to act this way.  I do think the Democrats—I‘ll send a very slight message to my friends in the Obama campaign.  Think long and hard about the position on drilling.  I think there are an increasing number of Americans who believe that if technology has improved so much to extract and to expand capacity and production for alternative sources of energy, then perhaps technology has improved to the extent that we can drill in a safer and more reliable way. 

Americans are sick of paying 1.70 more than they were a year ago. 

They‘re going to be listening closely to these politicians talk about ways. 

One quick point on Rove.  We pointed it out earlier.  I agree with Smerc in some ways.  But understand this, rove is also getting at taxes, taxes, taxes, and is saying that Barack Obama will raise your taxes.  He won‘t stop with the oil company.  I just say, we have to be very careful as we think about this issue.  My party does.  Certainly, the country is ready for some different approaches. 

GREGORY:  Let me move on to get to number three, so we can get a couple of whacks at it here.  New questions about Obama‘s position on Iraq.  Obama had a phone conversation with Iraqi Foreign Minister Hoshyar Zebari earlier this week.  Afterwards, Obama told reporters that he emphasized troop withdrawals on that call.  Listen.

(BEGIN VIDEO CLIP)

OBAMA:  The important thing is to send a clear signal to the Iraqi people and, most importantly, the Iraqi leadership that the U.S. occupation in Iraq is finite and is going to be coming to a foreseeable end. 

(END VIDEO CLIP)

GREGORY:  But the “Washington Post” reports the Iraqi foreign minister came away with a much different view of Obama‘s positions on Iraq.  This is the reporting, “the foreign minister said my message to Mr. Obama was very clear.  Really, we are making progress.  I hope any actions you will take will not endanger this progress.  He said, he was reassured by the candidate‘s response, which caused him to think that Mr. Obama might not differ all that much from Mr. McCain.”

You remember, a similar episode happened before the Ohio primary on the trail.  Obama was attacking NAFTA, the free trade agreement.  But in early march, a memo from the Canadian officials revealed Obama‘s senior economic advisor had assured them not to be worried about Obama‘s anti-NAFTA rhetoric because it was just political positioning, and not a clear articulation of policy plans. 

Third question tonight, Obama, is he tougher in public than in private?  Is there an issue here? 

MADDOW:  I don‘t know.  I feel like, at this point, we don‘t know what really happened in that meeting.  We don‘t know what happened in the Austan Goolsbee thing either.  We certainly what know the incentives are of the people who are coming out of those meetings and saying, I got exactly what I want.  I think trying to judge what is happening behind closed doors when we‘re not there is tough. 

GREGORY:  I‘ve always wondered, though, Steve—and I‘ve got 20 seconds left.  The issue of whether Obama gets into office and sees Iraq in a much more complicated way than he does now. 

HAYES:  I think that‘s probably coming.  If you talk to generals, talk to uniform military folks, they will say that they anticipate the same thing. 

GREGORY:  All right, take a break here.  Come back, your play date with the panel when RACE FOR THE WHITE HOUSE returns.

(COMMERCIAL BREAK)

GREGORY:  We‘re back, your turn to play with the panel.  Back with us, the all star panel tonight, Harold, Rachel, Michael and Steven.  Charles in Maine writes something pretty interesting here in an email, “since the Democrats took control of Congress almost two years ago, the price of gas has gone up by 1.25, mortgage foreclosures have doubled and the war in Iraq is still going.  Why should we vote for more Democrats.”

It‘s a shot across the bow, Harold, to the party, but one that really has to be dealt with here, as Obama is on the campaign trail, and as are Congressional candidates.   

FORD:  Very seriously.  However, I would say the Democrats can be comforted in winning those three special elections in Mississippi, Louisiana and Illinois.  I think people attribute a lot of this to the stubbornness and inflexibility of the approach and policies pursued by the White House. 

However, Senator Obama is going to have to do some break and enable voters to believe that he will do things differently.  He‘s done it well up to this point throughout this primary.  But now that the general is starting, it‘s a different game.  The country will judge him based on his ideas and solutions going forward. 

GREGORY:  Interesting tonight, on Talking Points Memo, there‘s some reporting about Hillary Clinton having a conference call with her fund-raisers and other supporters, talking about throwing her support behind Barack Obama, encouraging her fund raisers to do that as well.  According to the site, Senator Clinton also suggested that she would soon be making public statements about the media coverage of the campaign, as well as the ways women were discussed.  Smerc, how does that enter into the campaign debate now and who does it help?  Who does it hurt? 

SMERCONISH:  At first blush, it sounds a bit like sour grapes, because I can‘t imagine what benefit there is to raise that now other than if she thinks it‘s going to drive voters to Senator Obama‘s column.  I think that is an issue dealt from the primary perspective and not one that applies to the general. 

GREGORY:  It‘s a unique way, Rachel, to make the media an issue in the campaign, which has been done before in different context. 

MADDOW:  Maybe you don‘t do it for an instrumental electoral reason.  Maybe you do it because you feel like this election campaign has revealed a problem in the country that you want to fix.  Maybe this isn‘t something that‘s about the election.   

GREGORY:  Right, but it‘s a question of timing.  You could certainly do that, but if you do it in the heat of the campaign, and you‘re just lost --

(CROSS TALK)

MADDOW:  But, if she waits until after the inauguration, at that point, who‘s listening? 

GREGORY:  Good point.  Thomas in California writes this from this email, “why would Barack Obama set aside ten valuable days of personal campaigning organizing and studying the current and rapidly evolving domestic and international crisis facing the country in order to have these numerous town hall meetings, which are apparently nostalgic to McCain.”

Steve Hayes, again, this is a play here of who can negotiate the right format for themselves, because this is something McCain wants to do, these town halls.  Obama could take well advantage of them, as well, but the format may benefit McCain. 

HAYES:  I think the format does benefit McCain.  He does very well.  He comes across as especially likable in these kind of town hall formats, especially when he fields hostile questions.  He handles them well.  He makes a joke.  He‘s got this down.  He did this forever, as the emailer points out, back in 2000. 

It served him quite well in the primaries in 2008.  It makes sense for McCain.  That said, I think the McCain campaign might be over confident about just how well McCain will do in these head-to-head formats in a town hall.  You hear, not only from the McCain campaign, from other conservatives, people suggest that Barack Obama can‘t speak when he‘s not reading from a teleprompter.  I think those things are over blown.  He has certainly made some mistakes, but I think it would be an error for Republicans and conservatives to assume that Barack Obama can‘t speak extemporaneously.  I‘ve heard him do it and he does it quite well. 

GREGORY:  But if you‘re McCain, at this stage, Smerc, you want as much one on one engagement as you can possibly get as this campaign goes forward.  He‘s not going to shirk away on the issues, certainly. 

SMERCONISH:  You‘re absolutely trailing, so consequently, you have to get any face time with the other candidate as you can garner.  But Stephen makes a great point; be careful what you wish for.  All of a sudden, if Barack Obama accepts and the expectations have been set, the bar has been set that everybody expects that John McCain is going to clean his clock in that environment, and he doesn‘t, it becomes a huge set back for him. 

GREGORY:  We‘re going to leave it there.  Thanks everybody for a great panel tonight, great discussion.  We‘ll be back tomorrow night at 6:00 p.m.  Eastern time.  “HARDBALL‘s” up next.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

END   

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